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White has scheduled a hearing for Friday morning in San Francisco to hear whether to extend the restraining order restricting the distribution of the documents.

Plaintiffs have not overcome the First Amendment free speech rights of Wikileaks
and its members, not to speak of the First Amendment rights of Public Citizen, the California First Amendment Coalition, and their members, to read the Wikileaks Web site.

These folks are the .50 caliber rifles (or, perhaps the .818 caliber Solothurns) of the modern free speech movement. If anyone can convince a judge to rethink the domain name prohibition, it’s probably them.

Wikileaks, by the way, was sued by a group of Swiss bankers–Bank Julius Baer–who claim in the lawsuit that confidential information is on the site. Wikileaks is still online at the Internet address http://88.80.13.160/wiki/Wikileaks and a host of mirrors including wikileaks.cx.

And the EFF/ACLU/etc. motion adds:

The permanent injunction has the effect of blocking access by anyone in the United States (and the world) to the Wikileaks Web site through the wikileaks.org domain name. As a result, it impedes access to the entire Wikileaks site, not just the documents that BJB claims are at issue in this litigation.

They stand a good chance. One reason why U.S. District Judge Jeffrey White ordered the domain name offline was that Wikileaks had not sent a lawyer to a hearing or responded in any form. After that, a judgment for the plaintffs wasn’t exactly a surprise.

Free speech matters. First principles matter. Wikileaks may not be exactly a news organization in the traditional sense, but precedents set in this case could ripple far beyond Judge White’s courtroom in San Francisco.

Now Wikileaks is receiving some independent legal support from free speech groups, including Public Citizen, the California First Amendment Coalition, the American Civil Liberties Union, the Project on Government Oversight, and the Electronic Frontier Foundation. They–and some media organizations also expected to file a brief–are asking to intervene on Wikileaks’ behalf.

The arguments that Public Knowledge Citizen and the CFAC make include:

In other words, it’s a bit like Apple not liking CNET News.com’s scoop a few years ago (which it was) about the switch to Intel microprocessors–and then trying to yank our domain name through a court injunction. Or AT&T trying to get us taken off the Internet after our story about how its lawyers filed an improperly redacted brief in the litigation over National Security Agency surveillance.

Wikileaks.org, a Web site that specializes in posting leaked documents often provided by whistleblowers, had its domain name yanked by a federal judge in California earlier this month.

The court lacks jurisdiction of the subject matter…This is a dispute between a Swiss bank and a Swiss citizen who is using an entity with foreign citizenship, Wikileaks, to post documents online. Federal courts are not available for the litigation of such cases.

“Forty percent of
car sales have a trade-in but if you look at consumer electronics, it’s not a significant number–less than 1 percent,” said Aurelien. “So we have our work cut out for us. There needs to be a little bit of change in consumer behavior, too.”

People can sell their stuff directly on eBay, of course, but Aurelien argues that it’s still too troublesome for most consumers. Only one in 30 of eBay’s registered users actually sells anything, he said.

In the summer, the company plans to expand its product catalog to laptops, beyond the trade-ins for Macbooks it already offers. Aurelien said the company’s ambition is to broker sales of more than just electronics.

Admit it: somewhere in a drawer or stashed in your closet, you have an old cell phone or digital camera with no practical purpose.

The Web site, which launched last July, acts as a broker between consumers and eBay or an electronics recycler.

To unload your old Treo or Canon, you write the product name into Second Rotation’s “dynamic pricing” application. You rate what kind of shape it’s in and the program tells you what Second Rotation will buy it for.

Second Rotation already takes cell phones, digital image and video cameras, gaming consoles, digital music players, and GPS systems.

You can then print out a shipping slip and arrange a pick up. Second Rotation then rehabs the goods to be sold on eBay. A small percentage–10 percent–are sent to reputable recyclers, says CEO and founder Rousseau Aurelien. It makes money brokering the transaction.

Second Rotation is a Web site designed to find a home for that used and no-longer-loved electronic gear. On Tuesday, the company announced that it has raised $4.4 million in funding led by Venrock to expand its product catalog and ramp up marketing.

Electronic waste is a growing problem. The Environmental Protection Agency earlier this month month launched a cell phone recycling program in an effort to raise consumer awareness.

Tired of that iPhone? Find a buyer online.

No, the most important news is who funded this round. Index Ventures.

Getting money from Index says a lot about DimDim. It has a lot of experience investing in open source. Index doesn’t suffer open-source fools easily. DimDim just got a big vote of confidence…along with the cash.

As is often the case with “news,” the most interesting story is in the subtext. As an example, DimDim, the open-source web conferencing company, just raised $6 million in a Series B round of financing. That’s great news for DimDim, but it’s not the most important news. (Though I’m sure DimDim employees will beg to differ.

commentary

For those who don’t follow the open-source world very closely, Index has funded some of the world’s best open-source companies, many funded by Danny Rimer, open-source rock star. Its portfolio is filled with MySQL, Zend, OpenX, and Pentaho, among others.

Blogspot inaccessible at 1:30 a.m. on April 14, 2008. (My IP hidden.)

(Credit:
Sinobyte)

From my connection in Beijing, Blogspot has again gone offline. The transmission stops on a Chinese ISP server.

I was able to get through using proxies. Anyone else, or is this just me? Blogspot had reemerged two weeks ago after years being blocked almost continuously.

On a conference call to discuss the results, company executives stuck closely to a standard earnings script without advancing the discussion regarding the big issues:

Yahoo lost an opportunity to seize the initiative by rebutting Microsoft Chief Executive Steve Ballmer’s latest take on the acquisition: “I wish Yahoo all the success with its results, but it doesn’t affect the value of Yahoo to Microsoft.”

But just as there are consequences for saying something injudicious on the conference call, there are consequences to playing it too straight. If it wants to fend off Microsoft, Yahoo has to prove to its shareholders that its alternatives are real.

• Selling to Microsoft. “Our board and management team continues to be open to any and all alternatives including a sale to Microsoft,” Yang said, but, “We will not enter into any transaction that does not recognize the full value of this company.”

I’d say “Ho hum,” but the stakes are too high right now. Unfortunately, Yahoo didn’t show any of its cards.

“The results, being neither fish nor fowl, presented a pretty clear outcome,” said Gartner analyst Allen Weiner. “I think they’re at that critical juncture where the best shareholder value they can give people is the $31 per share Microsoft has offered.”

• A partnership to test Google’s search ads alongside Yahoo’s search results, a move that could increase the revenue per click that advertisers pay Yahoo. Yahoo gave passing mention to the test but said, in effect, “Stay tuned.”

Yahoo reported solid earnings for its first quarter, but by completely sidestepping discussion of the big Microsoft acquisition issues, the company left more unresolved than resolved.

For example, sharing some preliminary results from the Google ad test could have helped advance the discussion about just how real some of the company’s alternatives are. Analyst estimates accord 9 cents to Google for each ad clicked to 4 cents at Yahoo, so a partnership could be financially important.

Instead, Yahoo merely reported earnings. For seizing the initiative, I guess we’ll have to wait for Ballmer.

• Partnerships such as one reported possibility to acquire AOL in exchange for an investment from Time Warner that could be used to repurchase Yahoo stock. The company is “expeditiously exploring a number of strategic alternatives,” Yang said.

And in after-hours trading, the company’s stock was essentially flat.

Yahoo’s financial results didn’t carry an implicit conclusion, either. They weren’t so bad that Microsoft’s attempt to acquire Yahoo for $31 a share looks generous or so great that Yahoo shareholders will laugh off their suitor.

The company had solid revenue growth, expressed cautious optimism about weathering an economic downturn, and modestly beat analysts’ profit expectations. Chief Executive Jerry Yang issued lukewarm metaphors: “Our results this quarter demonstrate we are on the right track. We are pursing the right strategy, and it’s beginning to bear fruit.”

Given that Yang had no big news to announce, he had to walk a fine line on the conference call. He didn’t want to throw in the towel to Microsoft, and he couldn’t declare that Yahoo now has got Google running scared. And addressing touchy issues can open a can of worms during the question-and-answer period.

Yahoo CEO Jerry Yang

(Credit:
Dan Farber/CNET Networks)

Do added value services trump ad based revenue models?

Let’s take QQ.com as an example, the leading Chinese online social network. The site is reported to have more than 300 million active accounts. That is eight times the member base of Facebook–and it’s the same size as the U.S. population.

(Credit: QQ)

I just returned from a trip to Shanghai, and in case you didn’t know anyway, here’s my No. 1 insight: China scales.

What’s also remarkable (and different from the Western social networks) is QQ’s monetization. Facebook posted revenue of $150 million for 2007 (and according to Plus8star a loss of $50 million); MySpace.com (purchased by News Corp. for $560 million) is projected to generate $750 million in revenue this year; and Bebo (purchased by AOL for $850 million) had revenue of just $20 million in 2007. While QQ reported revenue of $523 million and an astonishing operating profit of $224 million in 2007. The revenue distribution is unusual, too: 60 percent of the revenue came from services like games, an additional 21 percent from mobile services like ringtones, and only 13 percent from online advertising.

A Justice Department spokesman said the agency had no comment. Google spokesman Steve Langdon said “Google did not work with Jane Horvath on this issue when she was at DOJ.”

Update at 8:50 a.m. to clarify judge ruling in subpoena case, and at 2:55 p.m. to add further comment from the EFF.

“Google has an unprecedented ability to collect and retain very personal information about millions of Americans, and the DOJ and other law enforcement agencies have developed a huge appetite for that information,” EFF Senior Counsel David Sobel wrote in a statement Tuesday about the foundation’s lawsuit against the government agency (PDF). “We want to know what discussions DOJ’s top privacy lawyer had with Google before leaving her government position to join the company.”

Horvath, quoted in an article afterward, was critical of the initial subpoena, saying she had privacy concerns with it, the EFF says.

At the time Jane Horvath was named as the Justice Department’s chief privacy and civil-liberties officer in February 2006, Google was challenging a subpoena by the department for Web searches. A federal judge granted part of a Justice Department request for Google search data allowing Google to share information about random URLs but said users’ search queries were off-limits.

In the fall of 2007, Horvath was named as Google’s senior privacy counsel. The EFF asked the Justice Department for information about communications between Horvath and Google by filing a Freedom of Information Act (FOIA) request, but the Justice Department has not responded, according to the EFF.

Sobel explained that the nonprofit would probably have filed the lawsuit even if Google had never hired Horvath.

“There is no suggestion on our part that there was anything inappropriate by her being hired by Google or that there was a quid pro quo,” he said in an interview. “The obvious question is what contact had the DOJ’s chief privacy officer had with a large data collecting company like Google on data retention?”

The Electronic Frontier Foundation has filed a lawsuit against the U.S. Department of Justice seeking information about communications between a former top privacy official and Google, which eventually hired the official.

“The idea that we’re going to vote in a dissident slate of directors, and they’re going to get a better price than Yahoo’s independent directors, would have limited credibility,” Miller told the Journal.

“If Microsoft lowers the price, I’m not prepared to say that’s better than Yahoo remaining independent,” Miller said in the report.

But a number of Yahoo’s other major shareholders do. According to a recent report by RiskMetrics, 90 percent of Yahoo’s institutional investors hold shares in both stocks. And of this group, 15 of Yahoo’s top 20 institutional investors held more Microsoft shares than Yahoo. The report, however, was released in mid-February, so the investor mix has likely changed since then.

Miller’s Legg Mason Value Trust doesn’t hold any Microsoft shares, according to the Journal. As a result, Miller’s portfolio doesn’t have to worry about robbing Peter to pay Paul.

Yahoo has yet to get a white knight to step forward and defend the search giant, but on Tuesday, it scored a reconfirmation of an endorsement from Legg Mason, its second-largest shareholder, according to a report in The Wall Street Journal.

Bill Miller, Legg Mason’s portfolio manager, said his firm would cast its support to Yahoo if Microsoft reduces its current unsolicited bid, which is currently valued at $29.17 a share, according to the report.

Miller, in his interview with the Journal, said he considered the initial buyout bid too low, since prospective buyers don’t usually start the acquisition process with a final offer as their first bid.

Miller, meanwhile, indicated that he would support Yahoo in a proxy fight, if Microsoft reduces its bid.

And how does Miller feel about the current value of the deal now? It’s “not something I’m too excited about,” he said in the report.

But one major institutional investor for Yahoo feels otherwise. The investor told CNET News.com on Saturday, following the release of Microsoft’s three-week deadline for Yahoo to do a deal with the software giant, that he previously told Yahoo’s independent directors he might support an opposition slate, if the search company does not move forward with a deal.

When Microsoft initially announced its unsolicited buyout bid on February 1, the deal was valued at $31 a share. But as Microsoft’s stock has fallen since the deal was announced, so has the transaction value of the deal. The price is based on a combination of cash and the value of Microsoft’s stock, though Yahoo shareholders would have their choice whether to take that buyout price in all cash or all stock.

Legg Mason has not been shy in expressing its views on Microsoft’s bid. When the deal was announced two months ago, Legg Mason shortly came out in support of a higher bid for Yahoo than Microsoft’s initial $31-per-share offer.

Any other investors want to step into the mix?

Next week is a fish-or-cut bait week for Icahn, if he wants to allow enough time for influential institutional investment advisers like RiskMetrics, Glass Lewis & Co., and Proxy Governance to weigh in. These advisers to mutual funds, pension funds and asset management companies tend to make their recommendations to their clients on how to vote on proxy matters about a week to week-and-a-half before an annual shareholders meeting.

Problem was–same play, different results.

Tick, tick, tick…

In essence, the Icahn-Microsoft duo are asking Yahoo’s current board to take a gun to itself.

But isn’t that what proxy fights are for?

Icahn is running out of time to make a decision whether to run enough candidates on his slate to seek control of Yahoo’s nine-member board, or run a short slate, which aims to get representation on the board but not control. A third option is for Yahoo to offer up a couple seats to Icahn as part of a settlement, but given the bad blood between the parties that may be a challenging path to take.

If Icahn truly wants Yahoo’s current board removed, he can use the gun himself and file his final proxy, or definitive proxy, and run a full slate of dissident directors against Yahoo’s current board.

Investor activist Carl Icahn took a page out of his Oracle-BEA Systems matchmaker’s playbook to try to strike a deal between Yahoo and Microsoft on Friday.

Roy Bostock, Chairman of Yahoo said, “This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo’s stockholders in mind. Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr. Icahn to coerce Yahoo! into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo! stockholders. Yahoo’s Board of Directors will not allow that to happen. Yahoo’s Board remains open to any transaction that delivers full value to our stockholders - we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor.”

Mr. Bostock continued, “After negotiating among themselves without the involvement of Yahoo, Carl Icahn and Microsoft presented us with a ‘take it or leave it’ proposal under which we would be required to restructure the Company, hand over to Microsoft Yahoo’s valuable search business and to Carl Icahn the rest of the Company, giving us less than 24 hours to respond. It is ludicrous to think that our Board could accept such a proposal. While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”

The proposal was made on Friday evening and Yahoo was given less than 24 hours to accept the proposal, the fundamental terms of which Microsoft and Mr. Icahn made clear they were unwilling to negotiate. After reviewing the proposal with its legal and financial advisers, Yahoo’s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.

What may turn out to be a bit more odd, actually, is the demand in the joint Icahn-Microsoft bid that calls for the “immediate replacement” of the current Yahoo board members and removal of the top management team.

In the Oracle bid for BEA, Icahn intervened when the parties called it quits and directly hammered out a deal with Oracle that he could live with, according to the blow-by-blow BEA filing with the Securities and Exchange Commission. And once he got a deal he could be happy with, Icahn, BEA’s largest individual shareholder, took the Oracle proposal over to BEA with a proverbial shotgun in tow and said, “Take it, or else.”

BEA accepted Oracle’s offer, down to the exact penny Icahn said he was willing to accept.

But that game plan failed to produce similar results when Icahn teamed up with Microsoft to push Yahoo into a search-only deal.

News.com Poll Capitalist critique
Is Bill Gates right about the shortcomings of the free
market–and what needs to be done?

In his speech, Gates calls on businesses to launch “creative capitalism” projects of their own.

Take a look at the Journal’s video interview with Gates and sound off on what you think about Gates’ notion of “creative capitalism.” It’s also worth checking out the Journal article, which is filled with interesting details and a look at what’s on Gates’ bookshelf.

UPDATE: The actual speech is available for viewing.

Yes, businesses need to do more to help the less fortunate.
No, businesses should stick to making products and making money.

Much of Gates’ work at the Bill & Melinda Gates Foundation has centered on two particular shortcomings of capitalism–solving health problems that affect only the poor and improving educational systems.

But these days, Microsoft’s chairman is seeing first-hand the failures of the market system and is now calling on businesses to take greater responsibility for those left out in the cold by the free market.

But it is also true that it took Gates a long time to get to this place–a fact also pointed out in the Journal article. In recent years, the company has launched a broad array of programs to bring its technology to the billions that have been left out of the PC revolution. Some have argued, though, that it was the threats of Linux and piracy, not altruism, that initially prompted Microsoft to expand its mind.

“I definitely see, once I’m full time at the foundation, reaching out to various industries–going to cell phone companies, banks and more pharma companies–and talking about how…they can do these things,” Gates told The Wall Street Journal in an interview before his speech.

And even as Gates calls on businesses to start addressing capitalism’s shortfalls, his company continues to be criticized for abusing its position in the marketplace at the expense of rivals.

View results

Few people have benefited more from capitalism than Bill Gates.

In a speech Thursday at the World Economic Forum in Davos, Switzerland, Gates is calling on companies to think more broadly about how their products can benefit society.

I’m interested to see the reaction to Gates’ speech. It is hard to argue that Gates is not practicing what he preaches. In addition to using the bulk of his fortune to address capitalism’s shortcomings, Gates is shifting his work toward philanthropy. In July, Gates will step down from full-time work at Microsoft and shift his focus to the foundation.